I always thought the cash price was to ensure the vendor received the cash then and there, rather than delayed via the purchaser sorting out finance or putting it on a credit card. I have no problem paying someone cash for a job and discounting a payment for cash, but they still need to give me a GST invoice.
They still need to give an invoice, true. so thats moot as to cost saving. You would get the cash now, instead of next week or two weeks, so thats a HUUUGE discount to reduce the price by 20% to save a week or more interest. No, its to bypass tax, save paying 30 or 33% tax, and GST and give you the customer 20% of that back